SPECIAL GAS TAX STREET IMPROVEMENT FUND July 1, …SPECIAL GAS TAX STREET IMPROVEMENT FUND July 1,...
Transcript of SPECIAL GAS TAX STREET IMPROVEMENT FUND July 1, …SPECIAL GAS TAX STREET IMPROVEMENT FUND July 1,...
CITY OF STOCKTON
Audit Report
SPECIAL GAS TAX STREET IMPROVEMENT FUND July 1, 2004, through June 30, 2011
TRAFFIC CONGESTION RELIEF FUND July 1, 2004, through June 30, 2011
PROPOSITION 1B FUND July 1, 2007, through June 30, 2011
JOHN CHIANG California State Controller
August 2013
JOHN CHIANG
California State Controller
August 5, 2013
Anthony Silva, Mayor
City of Stockton
425 N. El Dorado Street
Stockton, CA 95202
Dear Mayor Silva:
The State Controller’s Office audited the City of Stockton’s Special Gas Tax Street Improvement
Fund and Traffic Congestion Relief Fund for the period of July 1, 2004, through June 30, 2011.
In addition, we audited the Proposition 1B Fund for the period of July 1, 2007, through June 30,
2011.
Our audit found that the City accounted for and expended its Special Gas Tax Street
Improvement Fund, Traffic Congestion Relief Fund, and Proposition 1B Fund in compliance
with requirements, except that:
The City charged ineligible interest expense of $10,686 to the Gas Tax Fund, through
negative interest allocation, and thereby understated the fund balance of the Gas Tax Fund by
$10,686.
The City charged ineligible interest expense of $45,469 to the Traffic Congestion Relief
Fund, through negative interest allocation, and understated other eligible expenditures by
$45,469. Therefore, the overall Traffic Congestion Relief Fund balance is unchanged.
The Gas Tax Fund cash was impaired because it was pooled with other funds and was used
for general operating costs of the City.
If you have any questions, please contact Steven Mar, Chief, Local Government Audits Bureau,
at (916) 324-7226.
Sincerely,
Original signed by
JEFFREY V. BROWNFIELD, CPA
Chief, Division of Audits
JVB/kw
Anthony Silva, Mayor -2- August 5, 2013
cc: Bob Deis, City Manager
City of Stockton
Vanessa Burke, CFO, Administrative Services
City of Stockton
Laurie Montes, Deputy City Manager
City of Stockton
Kurt Wilson, Deputy City Manager
City of Stockton
Elena Adair, Assistant Director, Administrative Services Department
City of Stockton
Paul Canepa, Vice Mayor
City of Stockton
Elbert H. Holman, Jr., Council Member
City of Stockton
Kathy Miller, Council Member
City of Stockton
Moses Zapien, Council Member
City of Stockton
Dyane Burgos, Council Member
City of Stockton
Michael Tubbs, Council Member
City of Stockton
Steven Mar, Bureau Chief
Division of Audits, State Controller’s Office
Mike Spalj, Audit Manager
Division of Audits, State Controller’s Office
Chris Lek, Audit Manager
Division of Audits, State Controller’s Office
Daniel Finau, Auditor–in–Charge
Division of Audits, State Controller’s Office
City of Stockton Special Gas Tax Street Improvement Fund and Traffic Congestion Relief Fund
Contents
Audit Report
Summary ............................................................................................................................ 1
Background ........................................................................................................................ 1
Objective, Scope, and Methodology ................................................................................. 2
Conclusion .......................................................................................................................... 2
Follow-Up on Prior Audit Findings ................................................................................. 3
Views of Responsible Officials .......................................................................................... 3
Restricted Use .................................................................................................................... 3
Schedule 1—Reconciliation of Fund Balance ...................................................................... 4
Findings and Recommendations ........................................................................................... 5
Attachment—City’s Response to Draft Audit Report
City of Stockton Special Gas Tax Street Improvement Fund and Traffic Congestion Relief Fund
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Audit Report
The State Controller’s Office audited the City of Stockton’s Special Gas
Tax Street Improvement Fund for the period of July 1, 2004, through
June 30, 2011. We also audited the Traffic Congestion Relief Fund for
the period of July 1, 2004, through June 30, 2011. In addition, we audited
the Proposition 1B Fund for the period of July 1, 2007, through June 30,
2011.
Our audit found that the City accounted for and expended its Special Gas
Tax Street Improvement Fund, Traffic Congestion Relief Fund, and
Proposition 1B Fund in compliance with requirements, except the City
charged ineligible interest expense of $10,686 to the Gas Tax Fund,
through negative interest allocation, and thereby understated the fund
balance of the Gas Tax Fund by $10,686. The City also charged
ineligible interest expense of $45,469 to the Traffic Congestion Relief
Fund, through negative interest allocation, but understated other eligible
expenditures by $45,469. Overall, the Traffic Congestion Relief Fund balance is unchanged. In addition, the Gas Tax Fund cash was impaired
because it was pooled with other funds and was used for general
operating costs of the City.
The State apportions funds monthly from the highway users tax account
in the transportation tax fund to cities and counties for the construction,
maintenance, and operation of local streets and roads. The highway users
taxes derive from state taxes on the sale of motor vehicle fuels. In
accordance with Article XIX of the California Constitution and Streets
and Highways Code section 2113, a city must deposit all apportionments
of highway users taxes in its Special Gas Tax Street Improvement Fund.
In addition, a city must expend gas tax funds only for street-related
purposes pursuant to Streets and Highways Code section 2101. We
conducted our audit of the City’s Special Gas Tax Street Improvement
Fund under the authority of Government Code section 12410.
Government Code section 14556.5 created a Traffic Congestion Relief
Fund (TCRF) in the State Treasury for allocating funds quarterly to cities
and counties for street or road maintenance, reconstruction, and storm
damage repair. Cities must deposit funds received into the city account
designated for the receipt of state funds allocated for transportation
purposes. The City recorded its TCRF allocations in the Traffic
Congestion Relief Fund. We conducted our audit of the City’s Traffic
Congestion Relief Fund under the authority of Revenue and Taxation
Code section 7104.
Senate Bill 1266, Highway Safety, Traffic Reduction, Air Quality, and
Port Security Bond Act of 2006, was introduced as Proposition 1B and
approved by the voters on November 7, 2006, for a variety of
transportation priorities, including the maintenance and improvement of
local transportation facilities. Proposition 1B funds transferred to cities
and counties shall be deposited into an account that is designated for the
receipt of state funds allocated for streets and roads. The City recorded
its Proposition 1B allocations in the Proposition 1B Fund. A city also is
Summary
Background
City of Stockton Special Gas Tax Street Improvement Fund and Traffic Congestion Relief Fund
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required to expend its allocations within three years following the end of
the fiscal year in which the allocation was made and to be expended in
compliance with Government Code section 8879.23. We conducted our
audit of the City’s Proposition 1B allocations under the authority of
Government Code section 12410.
Our audit objective was to determine whether the City accounted for and
expended the Special Gas Tax Street Improvement Fund, the Traffic
Congestion Relief Fund, and the Proposition 1B Fund in compliance
with Article XIX of the California Constitution and the Streets and
Highways Code. To meet the audit objective, we determined whether the
City:
Properly deposited highway users tax apportionments and other
appropriate revenues in the Special Gas Tax Street Improvement
Fund;
Properly deposited TCRF allocations into an account designated for
the receipt of state funds allocated for transportation purposes;
Expended funds exclusively for authorized street-related purposes;
Proposition 1B funds expended in compliance with Government Code
section 8879.23; and
Made available unexpended funds for future expenditures.
We conducted this audit in accordance with generally accepted
government auditing standards. Those standards require that we plan and
perform the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
We did not audit the City’s financial statements. We limited our audit
scope to planning and performing the audit procedures necessary to
obtain reasonable assurance that the City accounted for and expended the
Special Gas Tax Street Improvement Fund and the Traffic Congestion
Relief Fund in accordance with the requirements of the Streets and
Highways Code and Revenue and Taxation Code section 7104.
Our audit found that the City of Stockton accounted for and expended its
Special Gas Tax Street Improvement Fund in compliance with
Article XIX of the California Constitution and the Streets and Highways
Code for the period of July 1, 2004, through June 30, 2011, except as
noted in Schedule 1 and described in the Findings and Recommendations
section of this report. The findings required an adjustment of $10,686 to
the City’s accounting records.
Objective, Scope,
and Methodology
Conclusion
City of Stockton Special Gas Tax Street Improvement Fund and Traffic Congestion Relief Fund
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Our audit also found that the City accounted for and expended its Traffic
Congestion Relief Fund in compliance with Article XIX of the California
Constitution, the Streets and Highways Code, and Revenue and Taxation
Code section 7104 for the period of July 1, 2004, through June 30, 2011,
except as noted in Schedule 1 and described in the Findings and
Recommendations section of this report. The findings require a
reclassification adjustment of $45,469 to the City’s accounting records.
Furthermore, Proposition 1B allocations recorded in the Proposition 1B
Fund were accounted for and expended in compliance with Government
Code section 8879.23 for the period July 1, 2007, through June 30, 2011.
The City satisfactorily resolved the findings noted in our prior audit
report, issued in September 2006.
We issued a draft on June 24, 2013. Vanessa Burke, Chief Financial
Officer, responded by a letter dated July 12, 2013, disagreeing with the
audit results. The City’s response (refer to pages 11-14) is included in
this final report as an attachment.
This report is intended for the information and use of the City of
Stockton’s management and the SCO; it is not intended to be and should
not be used by anyone other than these specified parties. This restriction
is not intended to limit distribution of this report, which is a matter of
public record.
Original signed by
JEFFREY V. BROWNFIELD
Chief, Division of Audits
August 5, 2013
Restricted Use
Views of
Responsible
Officials
Follow-Up on Prior Audit Findings
City of Stockton Special Gas Tax Street Improvement Fund and Traffic Congestion Relief Fund
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Schedule 1—
Reconciliation of Fund Balance
July 1, 2010, through June 30, 2011
Special Gas
Tax Street
Improvement
Fund 1
Proposition 1B
Fund 2
Traffic
Congestion
Relief Fund 3
Beginning fund balance per city $ 786,410 $ 4,210,235 $ 371,674
Revenues 9,003,613 — 147,563
Total funds available 9,790,023 4,210,235 519,237
Expenditures (8,798,675) 97,778 (519,237)
Ending fund balance per city 991,348 4,308,013 —
SCO adjustments: 4
Finding 1—Negative interest charged–GTF 10,686 — —
Finding 2—Negative interest charged–TCRF — — 45,469
Other TCRF eligible expenditures — — (45,469)
Total SCO adjustments 10,686 — —
Ending fund balance per audit $ 1,002,034 $ 4,308,013 $ —
___________________________ 1 The City receives apportionments from the State highway users tax account, pursuant to Streets and Highways
Code sections 2103, 2105, 2106, 2107, and 2107.5. The basis of the apportionments for sections 2103, 2105,
2106, and 2107 varies, but the money may be used for any street purpose. Streets and Highways Code section
2107.5 restricts apportionments to administration and engineering expenditures, except for cities with populations
of fewer than 10,000 inhabitants. Those cities may use the funds for rights-of-way and for the construction of
street systems. The audit period was July 1, 2004, through June 30, 2011; however, this schedule includes only the
period of July 1, 2010, through June 30, 2011. 2 Senate Bill 1266, Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006, introduced as Proposition 1B, provided funds for a variety of transportation priorities.
3 Government Code section 14556.5 created a Traffic Congestion Relief Fund (TCRF) in the State Treasury for allocating funds quarterly to cities and counties for street and road maintenance, reconstruction, and storm damage repair. The TCRF allocations were recorded in the Traffic Congestion Relief Fund. The audit period was July 1, 2004, through June 30, 2011.
4 See the Findings and Recommendations section.
City of Stockton Special Gas Tax Street Improvement Fund and Traffic Congestion Relief Fund
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Findings and Recommendations
The City of Stockton’s Special Gas Tax Street Improvement Fund (Gas
Tax Fund) had negative cash balances at various times during fiscal year
(FY) 2004-05 through FY 2010-11. The negative cash balances caused
the City to charge interest expense through negative interest allocation to
the Gas Tax Fund.
Streets and Highways Code section 2101 specifies that highway users tax
apportionments are to be expended only for the construction,
maintenance, and operation of public streets and roads, construction of
exclusive public mass transit guide ways, and related administrative
costs. Negative interest is not an eligible expenditure per the Streets and
Highways Code.
Recommendation
The City should transfer $10,686 into the Gas Tax Fund. In addition, the
City should establish procedures to ensure that interest allocations to the
Gas Tax Fund are not computed with negative cash balances.
City of Stockton’s Management Response
Management disagrees with this finding. The reference made in the
Audit Findings and Recommendations to the Streets and Highways
Code section 2101 does not preclude negative interest as an eligible
expenditure per the Streets and Highways Code. In fact, the code
indicates that interest from investment of the funds should be deposited
into the fund on a rational and equitable basis. As disclosed in Table B,
the fund typically runs negative, which is a cost to the City for the
operation of the fund due to delay in the receipt of appropriations as
compared to spending patterns. We believe that the model is equitable
and rational and supports the charges to the fund.
In addition, upon review of the Guidelines Relating to Gas Tax
Expenditures for Cities and Counties (Guidelines), issued by the
California State Controller, May 2004, negative interest (interest
charge) is not cited as one of the ineligible expenditures.
Section 2113 of the Streets and Highways Code states that “Interest
received by a city from the investment of money in its special gas tax
street improvement fund shall be deposited in the fund and shall be
used for street purposes”. Reference is also made in the Guidelines
under Special Accounting Requirements for Cities that interest received
by a city from the investment of money in its Special Gas Tax Street
Improvement Fund shall be deposited in the fund and shall be used for
street purposes. In the SCO supporting analysis, interest earnings
activities in the Gas Tax Fund were reviewed from FY 2005 through
FY 2011. It appears the SCO selectively chose only months in which
this fund was allocated negative earnings to calculate the amount, while
failing to take into account that these are entirely offset with positive
allocation months during those same periods to arrive at the $10,686
amount of negative interest allocation. Overall during the audit period
from FY 2005 through 2011, on an annual basis the Gas Tax Fund
received a net positive interest allocation of $179,152.
FINDING 1—
Negative interest
charged – Gas Tax
Fund
City of Stockton Special Gas Tax Street Improvement Fund and Traffic Congestion Relief Fund
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For the pooled cash concept to work, funds must be charged
appropriately when they rely on other funds for cash flow and be
credited fairly when the funds contribute to interest earnings. This is
accomplished by following the practice of pooling cash and
investments of all funds, except for funds required to be held by fiscal
agents under the provisions of bond indentures. Prior to July 1, 2011,
interest income earned on pooled cash and investments was allocated
on a monthly basis to the various funds based on average daily cash
balances and a fair market value at year end. Effective July 1, 2011, the
City changed its accounting policy and method to a quarterly allocation
of accrued interest and fair market valuation adjustments on the basis of
average daily cash balances. This change was made on a prospective
basis.
The City’s position is that the Gas Tax Fund received its equitable pro-
ration of interest earned, positive or negative, and is used for street
purposes.
SCO’s Comment
The City disagrees with the finding.
The Gas Tax fund is a restricted Special Revenue Fund and does not
allow for borrowing, therefore cash balances should never be negative
and negative interest should not be allocated.
Article XIX of the California Constitution, Streets and Highways Code,
and Guidelines Relating to Gas Tax Expenditures for Cities and Counties
provides for allowable uses of gas tax funds such as research, planning,
construction, improvement, maintenance, and operation of public streets
and highways. Negative interest charges do not fall under any of the
above categories.
Although the gas tax cash balance at times run negative, due to the
timing of apportionments as compared to spending patterns, this is done
at the City’s discretion.
The finding remains as stated.
The City’s Traffic Congestion Relief Fund (TCRF) had negative cash
balances at various times during FY 2004-05 through FY 2010-11. The
negative cash balances caused the City to charge interest expense
through negative interest allocation to the Traffic Congestion Relief
Fund.
Streets and Highways Code section 2101 specifies that highway users tax
apportionments are to be expended only for the construction,
maintenance, and operation of public streets and roads, construction of
exclusive public mass transit guide ways, and related administrative
costs. Negative interest is not an eligible expenditure per the Streets and
Highways Code.
FINDING 2—
Negative interest
charged – TCRF
City of Stockton Special Gas Tax Street Improvement Fund and Traffic Congestion Relief Fund
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Recommendation
The City should transfer $45,469 into the Traffic Congestion Relief
Fund. As there are other eligible TCRF expenditures, the City should
increase the TCRF expenditures by $45,469. Overall, the Traffic
Congestion Relief Fund balance should remain the same. In addition, the
City should establish procedures to ensure that interest allocations to the
Traffic Congestion Relief Fund are not computed with negative cash
balances.
City of Stockton’s Management Response
Management disagrees with this finding. The reference made in the
Audit Findings and Recommendations to the Streets and Highways
Code section 2101 does not state that negative interest is not an eligible
expenditure per the Streets and Highways Code. Please see responses to
Finding 1.
SCO’s Comment
Please refer to SCO’s comments to Finding 1.
The City’s Gas Tax Fund was impaired by the General Fund at various
times during FY 2008-09, FY 2009-10, and FY 2010-11. The General
Fund is the main operating fund and its cash is maintained in an
investment pool with cash from other funds, including restricted funds
(such as the Gas Tax Fund). During our review, we noted that the
General Fund was reporting negative cash balances at various times
during FY 2008-09, FY 2009-10, and FY 2010-11. The negative cash
balances were impairing and affecting the integrity of the Gas Tax Fund.
Fiscal Year
FY 2008-09
FY 2009-10
FY 2010-11
Month
General Fund
General Fund
General Fund
July
(25,248,914)
(21,548,014)
(1,799,496)
August
(29,519,630)
(24,594,681)
(6,622,644)
September
(25,943,960)
(23,400,406)
(11,971,146)
October
(22,203,955)
(19,418,317)
(18,752,254)
November
(28,492,716)
(20,487,250)
(24,153,512)
December
(18,596,701)
(11,235,036)
(16,849,320)
January
(30,251,371)
(24,614,562)
(16,723,166)
February
(17,703,463)
(16,566,645)
(8,917,656)
March
(21,114,495)
(18,455,345)
(11,334,763)
April
(16,200,957)
(12,368,716)
(10,415,417)
May
(16,430,315)
(14,040,656)
(13,225,742)
June
2,276,869
(390,947)
(9,213,475)
FINDING 3—
Impairment of cash
City of Stockton Special Gas Tax Street Improvement Fund and Traffic Congestion Relief Fund
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Streets and Highways Code section 2101 specifies that highway users tax
apportionments are to be expended only for the construction,
maintenance, and operation of public streets and roads, construction of
exclusive public mass transit guide ways, and related administrative
costs.
California Streets and Highways Code section 2118 states that:
When the State Controller determines it to be necessary, he may require
a county or city to deposit money received from the highway users tax
allocations in a separate bank account.
Recommendation
The City should develop and implement policies and procedures to
ensure that it does not impair other funds’ cash, especially the restricted
funds, for general operating costs.
The City must establish a separate bank account for the Gas Tax Fund.
This account shall be used to record all deposits and expenditures against
these moneys. The City must provide the State Controller’s Office with
proof that a separate bank account has been established. The bank
account shall remain open until the City provides evidence that it has
restored the financial health of the General Fund.
The City of Stockton’s Management Response
Management disagrees with the Finding. The SCO in their analysis
failed to include funds that are unrestricted that are included in the
General Fund for the Comprehensive Annual Financial Report (CAFR)
but segregated in the accounting system for tracking purposes. These
funds consist of the Library, Recreation, Entertainment Venues, and
other auxiliary fee and general funded operations.
When including these funds the general fund cash position is reported
as follows:
Table A
Fiscal Year
Month
FY 2008-09
General Fund
FY 2009-10
General Fund
FY 2010-11
General Fund
July
15,932,712
(12,755,358)
8,414,340
August
9,499,858
17,756,413
4,295,118
September
1,451,377
19,734,058
(1,039,616)
October
3,380,078
13,040,522
(7,960,241)
November
2,320,036
7,178,133
(11,600,274)
December
7,211,211
15,702,056
(5,967,707)
January
9,450,199
17,654,537
(7,840,504)
February
22,928,602
25,219,403
1,229,409
March
19,722,838
29,224,060
(613,797)
April
23,889,817
30,280,001
153,760
May
23,640,387
28,699,751
(2,319,246)
June
11,496,667
11,406,061
12,977,884
City of Stockton Special Gas Tax Street Improvement Fund and Traffic Congestion Relief Fund
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In addition, in FY 2009-2010, the SCO failed to consider that the City
had access and utilized a $32,180,000 2009 CSCDA Tax Revenue
Anticipation Note {TRAN) to fund cash flow deficiencies. In the table
below, the months in which the corrected general fund cash deficits
arose, there was sufficient cash in the TRAN, the borrowing funds
established per accounting policy (e.g. self-insurance funds) that was
sufficient to cover any shortfall in the general fund. In addition, in most
months the Gas Tax Fund had a cash deficit and wouldn’t have been a
fund to borrow from but was borrowing in reverse from the General
Fund to cover cost incurred prior to receipt of the apportionments from
the State of California. The Gas Tax Fund cash position as a percentage
of the total restricted cash position is less than 1% on average and
would not be impaired and is a fund of last resort not a fund of first
resort.
Based on the review of the Article XIX of the California Constitution,
Streets and Highway Code Sections 2100-2128.1 and Sections 2150-
5157, and Guidelines Relating to Gas Tax Expenditures for Cities and
Counties issued by the State Controller's Office in May 2004, none of
the publications discuss impairment of cash in the pooled cash system.
In addition, there is no guidance about whether deficit cash balances in
funds participating in the pooled cash arrangement create
“impairment.”
The City’s policy is to use City’s Workers Compensation and General
Liability Internal Service Funds as the lending funds to other City
funds with negative cash position at the end of each fiscal year as
reported in Note 3 to the City’s CAFR. The same policy is applied
during any given fiscal year. The monthly cash balance reports for all
City funds covering fiscal years 2008-09, 2009-10 and 2010-11 that
were provided for your review, show that there were sufficient cash
balances in the Workers’ Compensation and General Liability Internal
Service Funds every month in which General Fund cash balance went
negative, except for November 2011. However, in that same month
both the Gas Tax Fund and Traffic Congestion Relief Fund cash
balances were negative, making it impossible for the General Fund to
borrow money from them.
In reviewing the month end cash balances of the gas tax/federal funds
as compared to the restricted funds in total and applying the established
City policy, the SCO has lept to an incorrect conclusion. Our analysis
shows that the gas tax funds, as a percentage to the total of all other
restricted funds, during the period of the audit are insignificant to be a
borrowing fund and in fact are a borrowing fund themselves. See Table
B below.
The City carefully monitors its available unrestricted fund balances to
assure that there is no draw on the restricted funds cash that the City is
not able to repay by the end of the fiscal year. The City actually sought
bankruptcy protection because of its general fund insolvency and to
avoid any chance that the general fund would not be balanced and
begin implicitly borrowing from restricted funds. To emphasize the
matter further, the City has been vigorously defending its position in
the bankruptcy court of not using restricted funds cash for the
operations of the City’s General Fund.
City of Stockton Special Gas Tax Street Improvement Fund and Traffic Congestion Relief Fund
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Table B
General Fund
Totals
Gas Tax Fund
Totals
Traffic
Congestion
Relief Fund
Totals
All Restricted
Fund Totals
% of All
Restricted Funds
Gas Tax TCRF
Jul-08 15,932,712
199,500
27,443
280,237,562
0.07% 0.01%
Aug-08 9,499,858
197,704
(507)
251,844,293
0.08% 0.00%
Sep-08 1,451,377
1,414,918
(43,460)
250,241,603
0.57% -0.02%
Oct-08 3,380,078
592,754
641,495
239,820,082
0.25% 0.27%
Nov-08 2,320,036
585,628
460,568
224,187,668
0.26% 0.21%
Dec-08 7,211,211
1,381,983
174,928
240,067,960
0.58% 0.07%
Jan-09 9,450,199
536,417
205,974
242,785,314
0.22% 0.09%
Feb-09 22,928,602
536,982
66,248
230,707,210
0.23% 0.03%
Mar-09 19,722,838
537,253
(532,248)
217,117,725
0.25% -0.25%
Apr-09 23,889,817
224,495
(158,979)
226,183,694
0.10% -0.07%
May-09 23,640,387
225,103
(160,194)
239,539,563
0.09% -0.07%
Jun-09 11,496,667
2,182,944
(160,857)
256,420,068
0.85% -0.06%
Jul-09 (12,755,358) (127,952) 422,373 244,953,050 -0.05% 0.17%
Aug-09 17,756,413
(562,012)
422,373
220,645,661
-0.26% 0.19%
Sep-09 19,734,058
(707,045)
423,991
228,142,310
-0.31% 0.19%
Oct-09 13,040,522
(635,138)
368,440)
230,964,027
-0.28% -0.160%
Nov-09 7,178,133
112,710
(1,627,909)
221,399,297
0.05% -0.74%
Dec-09 15,702,056
(258,122)
(2,429,013)
225,051,732
-0.12% -1.08%
Jan-10 17,654,537
(562,775)
(2,738,858)
227,766,330
-0.25% -1.20%
Feb-10 25,219,403
(867,609)
(2,746,250)
215,177,205
-0.40% -1.28%
Mar-10 29,224,060
(982,387)
(1,652,004)
205,273,229
-0.48% -0.81%
Apr-10 30,280,001
924,360
(947,762)
228,873,441
0.40% -0.41%
May-10 28,699,751
713,098
(949,883)
218,088,904
0.33% -0.44%
Jun-10 11,406,061
1,041,534
(201,770)
231,186,393
0.45% -0.09%
Jul-10 8,414,340 625,728 529,822 242,967,128 0.26% 0.22%
Aug-10 4,295,118
(19,249)
377,776
198,796,802
-0.01% 0.19%
Sep-10 (1,039,616)
(414,064)
380,195
195,745,663
-0.21% 0.19%
Oct-10 (7,960,241)
(619,399)
(60,550)
217,309,059
-0.29% -0.03%
Nov-10 (11,600,274)
(80,843)
(139,179)
205,636,212
-0.04% -0.07%
Dec-10 (5,967,707)
(271,438)
(140,598)
209,296,338
-0.13% -0.07%
Jan-11 (7,840,504)
(13,753)
(141,552)
220,681,557
-0.01% -0.06%
Feb-11 1,229,409
271,661
(141,698)
214,154,905
0.13% -0.07%
Mar-11 (613,797)
487,110
(141,917)
191,293,614
0.26% -0.07%
Apr-11 153,760
131,613
(142,157)
204,055,521
0.06% -0.07%
May-11 (2,319,246)
908,890
(142,483)
202,010,258
0.45% -0.07%
Jun-11 12,977,884
766,167
––
222,920,565
0.34% 0.00%
SCO’s Comment
The City disagrees with the finding.
The City’s General Fund cash position in the FY 2010-11
Comprehensive Annual Financial Report (CAFR), included other
unrestricted funds such as Library, Recreation, Entertainment Venues,
and other auxiliary fee and general funded operations. Even with the
inclusion of those funds, there are still negative cash balances for a
number of months, therefore impairing other funds with positive
balances.
City of Stockton Special Gas Tax Street Improvement Fund and Traffic Congestion Relief Fund
-11-
The City claims to have access to and can utilize a 2009 CSCDA Tax
Revenue Anticipation Note (TRAN) to fund cash flow deficiencies, but
this was not utilized. The City also claims to have a policy to use City’s
Workers Compensation and General Liability Internal Service Funds as
lending funds (Note 3 - CAFR). This is incorrect. Note 3 does not define
a policy and the funds noted above were not used.
Finally, the fact that Gas Tax cash represents a small percentage of the
cash investment pool and also has some months of negative balances
does not prevent it from being potentially impaired when its balances are
positive. Also, as discussed under SCO’s response to Finding 1, the Gas
Tax Fund is a restricted Special Revenue Fund and does not allow for
borrowing from other funds, therefore cash balances should never be
negative.
The finding remains as stated.
City of Stockton Special Gas Tax Street Improvement Fund and Traffic Congestion Relief Fund
Attachment—
City’s Response to Draft Review Report
State Controller’s Office
Division of Audits
Post Office Box 942850
Sacramento, CA 94250-5874
http://www.sco.ca.gov
S12–GTA–016